The ongoing escalation of delays and cost overruns on major capital projects in Northern Ireland is “unacceptable”, a committee of MLAs has said.
The Northern Ireland Executive should consider setting up an independent oversight board to improve the management of major capital projects, the NI Public Accounts Committee has said in a report that also calls for an an urgent review of the Northern Ireland Civil Service Board's effectiveness and work to address skills gaps in the NICS.
There was an estimated overspend of £3.03bn across the 78 major capital projects managed by Stormont departments as of July last year, according to the committee's latest report.
The projects, which include Belfast Maternity and Children’s Hospital, the A5 and A6 and the Belfast Transport Hub, had a combined original approved cost of £5.71bn and an estimated cost on completion of £8.74bn.
The report is a follow-up to a 2024 Northern Ireland Audit Office report that found cost overruns totalling £2.45bn across 77 major capital projects – those whose costs exceed £25m – run between April 2019 and 31 August 2023.
A 2020 report by the NI PAC committee made several recommendations to improve the management of such projects.
However, the committee has now found most of the recommendations have not been implemented – including a call to consider appointing a single oversight body or creating an independent advisory body to be responsible for monitoring major capital projects.
"The committee is extremely frustrated by the lack of action taken to address delays and overspends," committee chair Daniel McCrossan said.
Witnesses to the committee’s latest inquiry pointed to the establishment of an Investment Strategy for Northern Ireland committee – a subcommittee of the NICS Board that oversees the Investment Strategy for Northern Ireland and scrutinises projects.
But PAC said it “remains of the view that more needs to be done to determine what benefits could be gained through a truly independent monitoring and oversight body”.
The report calls for an urgent review of the NICS Board’s leadership, governance and effectiveness after concluding that the board “does not have the authority to hold major capital project teams to account”. The board also has neither any fiduciary responsibility nor the constitutional right to direct a departmental permanent secretary.
While the board receives six-monthly progress reports on major capital projects, the reports “lack the necessary detail for effective scrutiny and decision making in respect of capital projects”, the report says.
“The committee was shocked to find that information on cost and time overruns is not reported to the NICS Board and was left with significant questions about the purpose and value of the current reporting arrangements and the effectiveness of the NICS Board in this regard,” it says.
The report calls for an annual review of the NICS Board, as well as an externally facilitated independent review at least once every three years. These should examine whether the board is operating effectively and whether its oversight is helping to improve performance in the delivery of major capital projects.
“The committee expects to receive a copy of the first evaluation once complete and be informed as to where the findings and possible recommendations will be reported to, and how any proposed action will be taken forward,” the report says.
Delivery arrangements 'not fit for purpose'
The arrangements for the delivery of major capital projects remain “not fit for purpose”, the committee found.
In a 2020 report, the committee said the system for commissioning and delivering major capital projects was “over complicated” and called for an assessment of the extent to which alternative structures could improve project delivery.
But there is “little evidence that alternative structures have been fully considered”, the most recent report says.
It says the NICS Board should commission an independent review of the roles and responsibilities of all bodies involved in the delivery of major capital projects, to determine how major capital projects could be delivered more efficiently and effectively.
"This should include ensuring that any unnecessary duplication is ended and ways of working together and making best use of skills are identified and enabled," says the report, which adds that the committee expects to see progress on this work within six months.
The report also says the Northern Ireland Civil Service has been “slow to take action” to address skills shortages – citing the skills involved in the commissioning and delivery of major capital projects in particular.
“Projects continue to be commissioned when insufficient suitably skilled staff are in place to successfully deliver them. The committee considers that much more work is needed to understand the current skills available across the NICS, the extent of the skills gap, and that urgent and informed action is taken to close that skills gap, as well as make better use of the skills available,” the report says.
The NICS must “urgently address” these professional and technical skills gaps, the report says. It should work to identify skills gaps on existing project teams and take immediate action to upskill those teams, it adds.
The report also identifies a “clear need” to develop future workforce plans and says the NICS should conduct a skills-gap analysis across departments and their arm’s-length bodies.
“Following completion, a specific, collaborative, timebound action plan to address those gaps should be put in place,” it says.
The report also calls for greater transparency and accountability over major capital overspends, which stay within the departmental oversight structure. At the moment, neither the head of the civil service nor the NICS Board are sighted on, or accountable for, addressing overspends or project delays.
Progress on the delivery of all major capital projects should be published annually by the Northern Ireland Executive, including cost and time details, it says, “presented in a format which easily allows comparison with original plans and include narrative explanations for delays and/or cost overruns”.
Committee chair McCrossan said the escalation in major capital project costs since the NIAO's report last year "is simply unsustainable".
Deputy chair Cheryl Brownlee added: “Our view is that the current arrangements for delivering major capital projects are not fit for purpose and that the establishment of an independent oversight body in Northern Ireland must be considered. A review of leadership and governance is also urgently required. We also want to see an annual progress report published on the delivery of all major capital projects – and that the Department of Finance takes the lead role in monitoring this.
“Regrettably, the committee is also repeating its recommendation that NICS urgently addresses the lack of professional and technical skills – to ensure project teams have the necessary capacity and capability to successfully deliver major capital projects.”
Responding to the report, Robert Murtagh, national officer for the FDA union, said ministers “need to take responsibility” for overspend on major capital projects in Northern Ireland.
“This isn’t something the civil service can address on its own – it requires political leadership. When the committee speaks about a need to review leadership, it’s unfair to point the finger solely at civil servants,” he said.
“Nobody wants to see this kind of overspend on capital projects, especially our members in the NICS," he added.
“These projects have progressed against a backdrop of political instability at Stormont, in which we haven’t had a functioning executive for the majority of the past eight years. The fact this coincided with a period of rapid inflation in recent years created a perfect storm leading to the kind of overspend we’ve seen."